* adds another half percentage point to stake
* now holds 2.54 percent
LONDON, Nov 11 Hedge fund billionaire John Paulson raised his firm's stake in Cadbury CBRY.L on Wednesday and now holds 2.54 percent of the British confectioner, the subject of a hostile bid by U.S. food group Kraft KFT.N.
Paulson became the industry's highest-paid manager in 2007 by betting that U.S. house prices would fall. His firm Paulson & Co now holds 34.9 million shares in Cadbury, a British regulatory filing showed on Wednesday.
On Tuesday, Paulson doubled the stake in Cadbury to 2.08 percent, buying 14.8 million shares.
Kraft on Monday took its $16.2 billion offer straight to shareholders, refusing to sweeten its bid price, and setting the stage for a takeover battle that could take months.
At current values, Kraft's cash-and-share offer is worth 720 pence per Cadbury share, well below the British group's share price of around 763 pence.
(Reporting by Douwe Miedema)